Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARDS :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: form 3cd :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: empanelment :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: VAT Audit :: Central Excise rule to resale the machines to a new company :: cpt
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

Tax refund on house perks possible
June, 12th 2007

Taxpayers who availed of concessional accommodation from their employers will have to file fresh tax returns for 2005-06 to seek a refund of additional taxes that they have paid during the year.

Thats on account of an amendment that was introduced by the government at the time of the passage of the Finance Bill. The value of concessional accomodation as perquisite for tax purposes was reduced from 20% of salary to 15% in cities that has a population of over 2.5 million.

For cities with population between one million and 2.5 million, the perk value has been halved to 10%, while for cities with population between 400,000 and 1 million it has been slashed from 20% to 7.5%. And, for the rest it has again halved to 7.5%.

There is another rider: the benefit is only available if the accomodation provided by the employer has been made available at concessional rates for which only a token amount is charged. It does not benefit those who live in rent-free accomodation.

Besides, you can only claim a refund (by filing a fresh return) if you filed a the original tax return for 2005-06 within the stipulated time which was July 31 2006.

This is a substantial concession extended by government. Suppose an employee residing in a metro or a category A city gets a salary of Rs 10 lakh per annum. The value of his concessional accommodation for tax purposes has been reduced from Rs 2 lakh to Rs 1.50 lakh. If he pays concessional annual rent of Rs 25,000, the net value of the perquisite has come down from Rs 1.75 lakh to Rs 1.25 lakh. Hence, he will save a tax of about Rs 16,800.

In smaller towns like Bokaro and Bhilai, the benefit to the tax payer is even more substantial as the value of perquisite has been revised downwards from 20% to 10% of the salary.

The concessions have been granted with retrospective effect from 2005-06. But, most of the taxpayers have already paid the taxes and filed the return for 2005-06.

But, to get the refund of the previous year, tax partner of Ernst and Young Amitabh Singh said that the taxpayer will have to file a revised tax return. But, a taxpayer can file revised tax return only if he had filed the original return during the stipulated time, that is between April 1 and July 31,2006.

Otherwise, he will have to forego the extra tax that he had deposited for 2005-06 on the perquisite of concessional accommodation, unless the department issue fresh guidelines.

Singh said that to eliminate this discrepancy the government should issue a direction to the tax authorites to unilaterally re-calculate the perquisite value of concessional accommodation and refund the excess taxes, if any, to the employee affected by the amendment to the bill. India does not have provision to carry forward any excess taxes paid.

However, for 2006-07, taxpayers can claim the refund by filing the return before July 31, 2007.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Contact Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions